Ask any UNC student what the greatest challenge facing them after graduation and they will tell you paying down the staggering mountain of debt accumulated over four years of college.
Nearly half of all UNC students have incurred significant debt averaging $25,218. North Carolina ranks 37th in student loan debt which some students racking up $50,000 or more. In the United States, the total college student debt totals a mind-boggling $1.3 trillion. More than all installment car loans combined.
It’s like an albatross hanging around the neck. It’s an enormous drag on the economy. Many graduates will return home to live with their parents. They delay renting an apartment, getting married, starting a family. Buying a home is out of the question.
That isn’t exactly a formula for job creation. It’s a big reason why our economy is in the doldrums and will continue to stagnate unless we solve this economic dilemma.
Why is this happening?
Draconian cuts by the state legislature over the last few years have been devastating and probably the worst in our state’s history. Higher education funding in North Carolina has been reduced by more than 20 percent since 2008. Meanwhile, average tuition levels have risen by 36 percent over the same period.
Veterans returning from World War II, the Korean War, and the Vietnam War qualified for the GI Bill and had their college education fully paid for. We need to implement a similar program for students like the Civilian Conservation Corps created by FDR during the Great Depression. That would allow young people to work on government projects and earn full tuition.
A proposal by the General Assembly to set up a community college program that would automatically open the door to entry into UNC would do little to ease the student debt quagmire. But, I can assure you that if college becomes unaffordable except to the rich, America would become a nation in which the middle class is relegated to the history books.
— Walt Mackhttp://chapelboro.com/columns/the-commentators/student-loan-debt-crushes-college-grads
WASHINGTON – A bill to cut the interest rates of new student loans goes to President Barack Obama for his signature.
On Wednesday, the House approved the bipartisan measure that calls for reducing the rates of Stafford subsidized and unsubsidized loans that had doubled July 1.
Interest rates would be tied to stock market performance.http://chapelboro.com/news/national/house-approves-lower-rates-on-student-loans
Story by Philip Elliot (AP)
WASHINGTON — Senators have reached a bipartisan deal to restore lower interest rates on student borrowers.
The breakthrough came Wednesday, one day after lawmakers huddled with President Barack Obama at the White House. Lawmakers are expected to vote as early as Thursday on the deal that would lower rates before students return to campus.
The deal would offer students lower interest rates through the 2015 academic year but then rates were expected to soar. Undergraduates could face rates as high as 8.25 percent, while graduate students would see rates as high as 9.5 percent and parents’ rates would top out at 10.5 percent.
The deal is described by Republican and Democratic aides who insist on anonymity because they are not authorized to discuss the ongoing negotiations by name.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
The bipartisan proposal is the latest to emerge from near constant work to undo a rate hike that took hold for subsidized Stafford loans on July 1. Rates for new subsidized Stafford loans doubled from 3.4 percent to 6.8 percent, adding roughly $2,600 to students’ education costs.
Lawmakers and their top aides have been tinkering with various proposal — nudging here, trimming there — trying to find a deal that avoids added red ink for students and the government alike.
The rate hike did not affect interest rates on existing student loans for undergraduate students, graduate students or parents.
Lawmakers from both parties have tried to restore subsidized Stafford loan interest rates without adding to the deficit. To accomplish that, they have been tinkering with rates on all federal direct lending programs. In most cases, they have linked rates to the financial markets; the result has been lower rates in the short-term but larger bills for future classes.
Undergraduates last year borrowed at 3.4 percent or 6.8 percent, depending on their financial need. Graduate students had access to federal loans at 6.8 percent and parents borrowed at 7.9 percent.
Under the deal being considered, all undergraduates this fall would borrow at 3.85 percent interest rates. Graduate students would have access to loans at 5.4 percent and parents would be able to borrow at 6.4 percent.
But if the economy improves as congressional economists predict, rates would climb in coming years.
The details were still subject to change and aides on Wednesday said previous agreements on student loans have fallen apart after the Congressional Budget Office has returned estimates on how much the system would cost over the next decade.
Lawmakers from both parties met with Obama and Vice President Joe Biden a day earlier at the White House. An outline of an agreement seemed to be taking shape Tuesday, with Democratic Sen. Dick Durbin of Illinois and Republican Sen. Lamar Alexander of Tennessee guiding the talks.
Sen. Tom Harkin, the Iowa Democrat who chairs the Senate’s education panel, said the caps on interest rates were still too high. That seemed to again derail the talks.
Senators returned to talks on Thursday in Durbin’s office although Harkin continued to object to the high rate on caps.
The House has already passed student loan legislation that also links interest rates to the 10-year Treasury note. If the Senate can reach a deal, the differences between its version and the House version could be resolved before students return to campus this fall.
So far, few students have borrowed for fall classes. Students typically do not take out loans until just before they return to campus and Congress still has time to restore the lower rates.http://chapelboro.com/news/national/ap-sources-senators-reach-deal-on-student-loans